Does Former Lawyer Working on a Contingency Fee Arrangement Who Withdraws from Pending Lawsuit Waive His or Her Attorney Lien?

It happens that lawyers who handle nursing home abuse cases, medical negligence cases, personal injury cases, wrongful death cases, birth injury cases, product liability cases and general injury cases for those who were injured or killed work on a contingency basis with their clients. That means that the client pays nothing to the lawyer unless there is a recovery by way of a settlement or judgment. At times, cases that have been filed turn out to be not as solid as the lawyer may have envisioned. Sometimes, for other reasons dealing with the handling of the case or a client disagreement, the attorney and client agree to withdraw an appearance in the pending case so that the client can find another lawyer.

In one case that occurred in our practice, a case involving a man who was seriously injured in a motorcycle accident, the attorney first handling the case withdrew early in the litigation and left the client to search for another attorney. The client located an attorney whose primary practice is outside of Illinois, but hired Kreisman Law Offices to act as local counsel.

The case was a very difficult and serious injury case. It involved a motorcycle and road construction. The client hired new counsel and the litigation ensued. After the taking of as many as 50 depositions of fact witnesses, experts and medical witnesses and after a long and tedious mediation, the case was finally settled two years later.

The second law firm on the case spent upwards of $200,000 on the cost related to discovery, investigation, depositions and multiple experts. Now that the case is settled, the original lawyers have asserted what they believe to be their still valid attorney’s lien. The question then begs to be answered: what is the first lawyer entitled to ask?

It happens that in Illinois, there is no apparent distinction between representations in which the lawyer has withdrawn or in which the lawyer has been terminated by the client. In re Estate of Callahan, 144 Ill.2d at 40-41; Twin Sewer & Water, Inc. v. Midwest Bank & Trust Co., 308 Ill.App.3d 662, 667 (1999). “An attorney who withdraws from a case for a justifiable cause, or is terminated without cause, may recover compensation for services rendered.” The measure of the lawyer’s recovery lies in quantum meruit for services actually rendered. Twins Sewer, at 667.

In these set of facts, the attorney here who had withdrawn from the case would be entitled to only quantum meruit, which an amount based on work is done, not a percentage of the recovery as would be the case if their contract with the client were still enforceable. It was our understanding that the first lawyer had filed the lawsuit and had taken or attended no more than 2 or 3 depositions before withdrawing from the case.

The only issue here would be when a lawyer does withdraw from a case and another lawyer takes up the litigation, the withdrawing attorney would be able to receive from a settlement or judgment only the reasonable value of services and court costs. The court would be the one that would consider “the skill and standing of the attorney employed, the nature of the case and the difficulty of the questions at issue, the amount and importance of the subject matter, the degree of responsibility involved in the management of the case, the time and labor required, the usual and customary fee in the community, and the benefit resulting to the client.” In re Estate of Callahan, 144 Ill.2d at 161.

In this fact situation where the former lawyer did very little in comparison to the lawyer who took the case thereafter and litigated it to the extent which led to the favorable settlement that the client approved, the former lawyer may be strictly limited to recover only costs that he or she incurred for the work done. This is because the first lawyer’s contingency agreement was extinguished due the severance of the attorney-client relationship and the small amount of work done in the case.

It would here by patently unfair to allow the former counsel to recover a part or percentage of the attorney fees under an old but now extinguished contingency attorney-client agreement because it would result in a windfall. At best, the withdrawing attorney would be entitled to a quantum meruit amount of attorney fees, which should be minimal and expended costs.

Kreisman Law Offices has been handling nursing home abuse cases, nursing home negligence cases, and catastrophic injury cases for individuals and families who have been harmed, injured or died as a result of the carelessness or negligence of another for more than 38 years in and around Chicago, Cook County, Will County Lake County, DuPage County, Kankakee County, and its surrounding areas, including Lindenhurst, Gurnee, Lake Bluff, LaGrange, Vernon Hills, Wheeling, Buffalo Grove, Hinsdale, Wheaton, Aurora, Joliet, Waukegan, Elgin, Chicago (East Side, Austin, Lawndale, Hegewisch, Lincoln Square), Matteson and Highland Park, Ill.

We serve the following localities: Cook County including Arlington Heights, Barrington, Berwyn Township, Chicago, Des Plaines, Glenview, Orland Park, Palos Park, Schaumburg, and Tinley Park; DuPage County including Downers Grove, Naperville, and Bolingbrook; Kane County including Aurora, Elgin and Geneva; Lake County including Waukegan; and Will County including Joliet.